Anti-Terrorism Trial of Mideast Bank Worries the Financial World
The judge called it the Beirut account.
It was a basic bank account at Arab Bank’s Al-Mazra branch in Beirut, Lebanon, unremarkable except for the name on the account: Osama Hamdan, a spokesman for the terrorist group Hamas.
The account and ones like it make up a critical financial infrastructure for a network that, at times, operates like a Social Security system for terrorists, the plaintiffs say.
While American authorities have prosecuted banks for processing tainted money, this is the first civil trial against a bank under the Anti-Terrorism Act.
Arab Bank contends that it properly screened for terrorists, checking names against the applicable lists of individuals and organizations designated as terrorists. As soon as Mr. Hamdan was added to one of those lists in 2003, the bank says, it shut down the account.
The stakes of the civil case are high, and not just for Arab Bank but for the banking industry, several lawyers who handle bank business say. They say a victory for the plaintiffs could further accelerate a wide-scale retrenchment among banks doing business in strife-torn areas.
At its most extreme, a verdict against Arab Bank, some bank lawyers worry, could mean that banks could be on the hook for wrongdoing by their clients even if the financial institutions followed banking rules.
Source: NYT
